2015 年 61 巻 3 号 p. 53-67
The main actors in creating international production networks in East Asia are foreign-invested companies. With recent rise in labor wages and political risks in China and Thailand, foreign-invested companies in these countries have started relocating their factories to neighboring countries. This study has analyzed the structure of the production networks created through foreign direct investments across East Asian countries with different factor endowments. It has focused on the division of labor between countries with ample labor force and low wages, such as Vietnam, Cambodia. and Lao PDR, and countries with higher wages, namely China and Thailand. It hypothesizes that a “horizontal” division of labor will emerge in final goods trade—in which labor-abundant countries specialize in low value-added items and capital-abundant countries specialize in high value-added items, while a “vertical” division of labor will emerge in parts and component trade—in which labor-abundant countries specialize in the labor-intensive part of the supply chain and capital-abundant countries specialize in its capital-intensive part.
The most important items traded between China and Vietnam in the category of electric machinery are “integrated circuits,” “communication equipment,” “video equipment,” and “wire harnesses.” This study has shown that trade patterns in most items support our hypothesis, but there are also a few items that do not follow the pattern suggested by the hypothesis. While the basic trade pattern is determined by the factor endowment structure of both countries, in some items Vietnam exports capital-intensive products and China exports labor-intensive products to each other. Such deviations from the basic pattern are explained by the economy of scale achieved by large-scale production in foreign-invested companies.
The electric machinery trade between Cambodia and Thailand, and Lao PDR and Thailand still remains at a small scale, and it follows the pattern suggested by our hypothesis. Therefore, the trade pattern can be explained by the differences in factor endowments in these countries.